Food stamp fraud goes to Capitol Hill

BALTIMORE (WMAR) - An ABC 2 News investigation into food stamp fraud is getting attention on Capitol Hill. Today, members of the House Committee on Oversight and Government Reform held a hearing to question officials who oversee the nation's food stamp program.

The flawed system is costing taxpayers millions, and ABC 2 News' Kristin Volk has more on today's developments from Washington.

The hearing started with what we and our partners at Scripps Howard News Service exposed in our investigation.

"What whistleblowers have done for us could have prevented many of those stores from being back in business," said Representative Darrell Issa.

The discussion followed with almost two hours of tough questioning.

Rep. Jackie Speier says, "these retailers have violated the law, and we don't debar them, then shame on us. Anyone want to respond to that?"

Kevin Concannon, the head of the U.S. Department of Agriculture's Supplemental Nutrition Assistance Program or SNAP, attempted to explain why disqualified vendors still accept food stamps, even after the USDA busts them for fraud – some as many as four times.

"While a vast majority of retailers follow the rules, a few bad actors will always seek to exploit snap," he commented.

But Concannon's own Inspector General - the USDA's Phyllis Fong testified that more could be done. 

Fong says "USDA has implemented regulations, and as a whole, the department could do a better job at implementing that. "

Food stamp scams cost taxpayers hundreds of millions of dollars each year. Store clerk secretly ring up a case of beer as a box of cereal or charge one hundred bucks on the card and gives fifty in return.

Repeatedly gaming the system for cash means recipients are even buying big-ticket items.

"It's critical that we focus our efforts on retailers who bypass the system that we put in place to control access," said Fong.

That's why the government permanently bans about 1,000  retailers nationwide for fraud every year. But our investigation with Scripps Howard News Service revealed nearly a third of the disqualified sites were approved to trade in food stamps again.

"Scripps Howard exposed fraud you were not aware of, correct?" asked Rep. Issa.

Concannon responded with a simple "correct. "

[The USDA says they're now doing more to combat fraud. That means stricter rules and stiffer penalties. But that's not enough for Chairman Issa."

"The next analysis on the level of waste has to be one that's independent from the USDA," said Issa.

In today's testimony, Concannon disputed what we exposed. 

"Our results show that the issues may not be as widespread as first reported by Scripps," he said.

After the hearing, we tried to get the Undersecretary to explain our discrepancies, but he and his staff couldn't give us an answer.

"You made your mistakes, and you're unwilling to admit it," said Concannon.

Concannon or his staff never contacted us to correct our reports.

The USDA has a hotline and a new website for the public to report alleged fraud. You can call the hotline at 1-800-424-9121 or click here

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